How a Financial Consultant Can Benefit Your Business: Startups face a great risk of becoming failed ventures. With our economy recovering from the financial recession during COVID-19, this fear of failure even increased. According to Oberlo, more than 70% of small businesses in the US were forced to shut down operations after the onset of the pandemic. Moreso, almost 29% of new businesses fail due to severe money trouble. However, do not let these statistics discourage you from starting or nurturing your own business, as there’s still a lot you can learn from a failed venture.
To ensure the success of your venture, it’s important to monitor and forecast your business’s bottom line. For this reason, many startups look to hire financial consultants that can play the whistleblower role.
Role of Financial Consultants
A financial consultant or advisor can assess your current financial situation and rack up strategies to help your business reach the future goals you have set for it. Consultants evaluate a company’s strengths and weaknesses by classifying proceedings and then give useful advice on improving certain areas such as cash flow administration, budget control, inventory management, etc.
Within the discipline of financial consultancy, there are a plethora of areas that exist. Many financial advisors have different specializations and certifications, such as
- Chartered Financial Analyst (CFA)
- Chartered Financial Consultant (CHFC)
- Certified Financial Planner (CFP)
- Certified Public Accountant (CPA)
The American Institute of Certified Public Accountants (NASBA) has over 400,000 in the US alone. However, all accountants are not CPAs, and to become a financial consultant who can help others, they must pass the CPA certification, which takes place at certain times a year according to the CPA exam schedule.
How Can Financial Consultants Help Your Business?
When starting a business or a campaign that is a part of your business, it is important to lay out a plan with timelines first. All businesses need a flexible and robust plan so you know what to do, how to do it, and when exactly to do it. Financial consultants can look at the wider picture of a client’s business and formulate a strategy accordingly.
You might be good at managing money but still struggle with forecasting. Just as you would go to a nutritionist for help with your diet or a mechanic for help with your vehicle, in the same way, a financial consultant is a master at auditing and economic planning. It is difficult to remain up-to-date with the constant changes in investment regulations, tax legislation, financial products, and insurance policies. This is where a consultant comes in so they can manage your business funds seamlessly.
- Economizing and Saving
Most businesses do not realize that hiring a financial advisor is an investment. Even though you will pay a consultant for their service, they will maximize your long-term profits and refine your product’s reputation. They also enable clients to always keep the bigger picture in mind when it comes to money and help them make the best decisions for investing and saving.
- Reducing Stress
Business owners have a lot to juggle; therefore, they have a lot on their minds. A consultant will help you by creating goals for your business without them getting too hectic for you to handle. A part of their work is acting as a guide and coach, so at no point are you in over your head with finances. They also keep you from acting impulsively and making emotional decisions which is more common than you think when so much of your effort and money is at stake. They also often communicate with multiple departments of your business and keep them in sync, reducing your stress.
- Future Security
Business owners do not start a business to think about what they will do about it after retirement. Will they hand it off to an heir? Will they make money by selling it off? However, having an end goal helps the owners run the business successfully. To attain an end goal, it is vital to make certain decisions and have a plan well before time. Financial consultants also help clients formulate a backup plan for when things might go south. Contingency planning is important to disaster recovery, risk management, and business continuity.
- Proactive Service
Financial consultants provide you with the best marketing strategies to increase the reach and sales of your product. They also actively review all contracts, policies, and statements to ensure none are lacking. Without judgment, they reach out to you with negative or positive feedback regarding your company’s policies.
Financial consultants help you get a good return on investment. They know how to develop the best strategies and latest marketing hacks to help your business maximize profits. Additionally, they manage all paperwork that can cover financial and legal protocols. They coordinate between various departments so your affairs can run seamlessly and hassle-free. Moreover, they also provide you with contingency plans to minimize losses in an emergency.